SAN FRANCISCO: Alphabet, Google’s parent company, reported quarterly profit on Tuesday that beat estimates and nearly doubled in 2021 — after a peak holiday season as the online advertising giant faces antitrust regulatory scrutiny.
The tech giant had net income of $20.6 billion, with revenue rising 32% to $75 billion in the final quarter of 2021, with profits totaling $76 billion at the end of the year.
That’s nearly double the $40 billion in annual profit reported in 2020, as the pandemic has accelerated the shift to online shopping, work and study, which has also benefited giants like Amazon and Facebook.
Alphabet CEO Sundar Pichai cited “strong growth in our advertising business … record quarterly sales of our Pixel phones despite supply constraints, and continued strong growth in our cloud business” for success.
Overall, Google generated more than $61 billion in ad revenue, mostly from its online search and video platforms, while its cloud business revenue rose 45 percent to $5.5 billion.
Google’s dominance on the web has propelled it to new heights during the pandemic, but it has also brought it under the radar of regulators around the world.
Pichai said on the earnings call that Alphabet is open to “sensible” regulation in Congress but has “a real concern that they could disrupt all kinds of popular services we provide to our users.”
Pichai said some regulatory proposals could have unintended consequences, such as weakening privacy and security, or putting U.S. companies at a disadvantage.
Alphabet’s strong earnings came as another pandemic-era winner, Apple Inc, reported record revenue last week as markets jittered about the future of tech and geopolitical risks like the Ukraine crisis.
However, regulators’ scrutiny around the world is stacking up as one of the most significant risks for the Silicon Valley giant.
“Google has the biggest uphill battle in terms of antitrust issues among all of the Big Tech companies,” Third Bridge analyst Scott Kessler wrote.
“Despite Apple’s bigger size and Meta/Facebook’s bad publicity, Google is seen most at risk in terms of US antitrust law,” he added.
